Already a member?

A Year-End Rally Could Jolt These ETFs Higher

With the start of a new month comes the opportunity for
investors to evaluate those
ETFs
that have established track records of solid performance in
December. The pickings are ample as the last month of the year is
usually one of the best for stocks with S&P 500 rising in 16
of the previous 20 Decembers. Before getting too excited, it
should be noted that the Stock Trader's Almanac points out the
stocks lose some of their December zest in presidential election
years.

As has been duly noted,
seasonal trends work in favor
of the investors that acknowledge those trends. For example,
energy stocks usually decline in November. What did the Energy
Select Sector SPDR (NYSE:
XLE
) do last month? It fell 1.22 percent.

Keep that type of concept in mind when shopping for December
winners. The list can start with the following ETFs.

PowerShares DB Gold Double Short ETN (NYSE:
DZZ
)
This will be the ninth December in which the SPDR Gold Shares
(NYSE:
GLD
) has traded. Over the previous eight, the world's second-largest
ETF by assets has a decidedly mixed track record having risen on
four occasions while having tumbled four times.

With that type of breakdown it is clearly hard to endorse a
bullish position in gold as a short-term December trade. However,
those that are committed to GLD or an equivalent fund such as the
iShares Gold Trust (NYSE:
IAU
) for the long-term can consider the PowerShares DB Gold Double
Short ETN as a short-term hedge against a long gold position. In
an ideal scenario, DZZ will rise this month and investors will be
deep enough in the money to hold the ETN until next year to stave
off 2012 short-term capital gains.

PowerShares Dynamic Media Portfolio (NYSE:
PBS
)
The PowerShares Dynamic Media Portfolio has been one of the
better-performing sector funds this year with a gain of almost
25.5 percent. That shows the ETF has lived up to the hype of
being
a play on election year advertising
and the release of some marquee films.

Sitting on a gain of 25.5 percent, it might appear that PBS is
ripe for some year-end profit taking, but that may not be the
case. First, fund managers that are up on media stocks will
likely look to push the tax consequences of those winning
positions out to to 2013. Second, the media sector has posted an
average gain of over three percent over the past 20 Decembers
while outperforming the S&P 500 nearly two-thirds of the
time,
according to Bloomberg
.

iShares Dow Jones U.S. Medical Devices Index Fund (NYSE:
IHI
)
As Bloomberg noted, December is usually quite kind to health care
equipment names. The sub-sector posts an average gain in the last
month of the year of nearly 3.6 percent and has outpaced the
S&P 500 in more than 72 percent of the previous 20
Decembers.

Savvy short-sellers will let unknowing bulls run the iShares
Dow Jones U.S. Medical Devices Index Fund higher this month there
are ominous clouds on the horizon for the medical device
industry. As Benzinga has previously reported,
Obamacare contains punitive, GDP-draining tax
on IHI constituents that could prompt the loss of tens of
thousands of jobs while crimping the profits of the ETF's
holdings.

The tax becomes effective in January and has already resulted
in
preemptive layoffs from some of IHI's
holdings
. In other words, medical device may honor their seasonal
tendency to rise in December. Just do not bet on the good times
lasting too far into 2013.

Please note that once you make your selection, it will apply to all future visits to NASDAQ.com.
If, at any time, you are interested in reverting to our default settings, please select Default Setting above.

If you have any questions or encounter any issues in changing your default settings, please email isfeedback@nasdaq.com.

Please confirm your selection:

You have selected to change your default setting for the Quote Search. This will now be your default target page;
unless you change your configuration again, or you delete your
cookies. Are you sure you want to change your settings?